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NEW YORK--Alcoa (NYSE:AA) announced today that a shareholder agreement was
concluded by the investors in the Serra do Facão
hydroelectric plant, which formalizes the creation of a company to
construct the power plant in São Marcos River,
in Brazil’s central region.

Investors in the newly incorporated company Romania, the consortium
funding the project, are as follows: Brazil federal power company Furnas
Centrais Elétricas (49.5%), Alcoa (35%), the
Poços de Caldas Municipal Electricity
Department (10%) and construction company Camargo Correa (5.5%).

The investment is part of Alcoa’s long term
strategy of developing energy projects in Latin America to support its
smelters and move toward self-sufficiency for its energy needs.

The consortium will be responsible for managing plant construction and
its transmission system, and for implementing social and environmental
programs in the surrounding communities.

With generation planned to start in 2010, Serra do Facão
will produce 210 MW of installed capacity and is a critical piece of
Brazil’s infrastructure strategy to support
economic growth.

Construction of the enterprise, budgeted at R$800 million (approximately
$372 million), will start in early 2007, with installation of the
construction site in the municipalities of Catalão
and Davinópolis, in Goiás.

The Serra do Facão Hydroelectric Power Plant
investors will adopt a series of initiatives to further the region’s
efforts to develop in a sustainable way.

About Alcoa Alumínio

Alcoa Alumínio S.A., a subsidiary of Alcoa
Inc., has been in Brazil for over 40 years. In Latin America Alcoa has
more than 6,000 employees and operations in six Brazilian states
(Pernambuco, Minas Gerais, Maranhão, Pará,
São Paulo and Santa Catarina), including a
new bauxite mine that is being set up in Juruti (Pará).
It also has operations in Argentina, Chile, Colombia, Peru and
Venezuela, in addition to being a shareholder in the hydroelectric
plants of Barra Grande and Machadinho, on the border between Rio Grande
do Sul and Santa Catarina. In a ranking prepared by the Brazilian
magazines Exame and Época,
it was considered one of the best companies to work for in Brazil and
one of the ten best companies in Latin America, according to the Great
Place to Work Institute. More information about Alcoa Latin America can
be found on its website: www.alcoa.com.br

About Alcoa

Alcoa is the world's leading producer and manager of primary aluminum,
fabricated aluminum and alumina facilities, and is active in all major
aspects of the industry. Alcoa serves the aerospace, automotive,
packaging, building and construction, commercial transportation and
industrial markets, bringing design, engineering, production and other
capabilities of Alcoa's businesses to customers. In addition to aluminum
products and components, Alcoa also markets consumer brands including
Reynolds Wrap® foils and plastic wraps, Alcoa®
wheels, and Baco® household wraps. Among its
other businesses are closures, fastening systems, precision castings,
and electrical distribution systems for cars and trucks. The company has
129,000 employees in 44 countries and has been named one of the top most
sustainable corporations in the world at the World Economic Forum in
Davos, Switzerland. More information can be found at www.alcoa.com

Notes to Editors:

There should be a tilde over the third "a" in "Serra do Facao," the
first "a" in "Sao Marcos River," the third "a" in "Catalao," the third
"a" in "Maranhao," and the first "a" in "Sao Paulo" throughout the
release.

There should be a cedilla under the first "c" in "Pocos de Caldas" in
the second graph of the release.

There should be an accent symbol over the second "e" in "Eletricas," the
first "o" in "Davinopolis," the "a" in "Goias," the first "i" in "Alcoa
Aluminio," the second "a" in "Para," and the "E" in "Epoca" throughout
the release.